NFL franchise valuations

XFL Football discussion.
MGB01
MVP
Posts: 3313
Joined: Wed Aug 14, 2019 8:42 pm

Re: NFL franchise valuations

Post by MGB01 »

4th&long wrote: Wed Aug 03, 2022 8:46 am Well now they are selling an interest in the league, so maybe that's why. BTW that's why I think the WLAF never took off, the teams was controlled min 51% by NFL. Schram called it the NFL of the spring... That didn't sit well.
I think the problem was there that wasn't the time with the USFL wounds still pretty fresh. Besides, as I've said before the NFL will back both to some level as a way of becoming their own super league of sorts, which has the added benefit of cutting off a LIV-style rival, even though it (potential rival) will actually have less chance than the one that went against the Premier League.

On a somewhat-related note, Jeff Pearlman was spouting BS (because ORANGEMANSTILLBAD) about how USFL1.0 wasn't trying to be a competitor to the NFL, which he'd have been right if he meant the original Dixon plan but no--that doesn't create clicks you know. Let's see: signing Herschel Walker because juniors couldn't go to the NFL at that time, drafting Dan Marino (didn't sign) and Jim Kelly (did), signing Doug Williams in the midst of a contract dispute, negotiating with Walter Payton the year before he set the rushing record. Yep, no competition there (I think I've found the next Florio).................................
Last edited by MGB01 on Wed Aug 03, 2022 2:38 pm, edited 1 time in total.
GregParks
UFLBoard Correspondent
Posts: 2095
Joined: Tue May 28, 2019 8:09 pm

Re: NFL franchise valuations

Post by GregParks »

Tank55 wrote: Tue Aug 02, 2022 10:12 pm
GregParks wrote: Tue Aug 02, 2022 8:52 pm what I understand largely creates that increase in worth of teams is TV rights fees that go through the roof. I don't think ad revenue increases exponentially the way TV rights fees do.
Right, which is why it made sense for FOX to get in the sports ownership business. Rather than be forced to choose between revenue and exposure, they could own the property directly. (As I know you know, this was NBC's thought process back in XFL 2001 after they let the NFL walk.)
And that's fine for FOX. But if their intention is to eventually sell off teams (which I guess we all assume is the case? Not sure if this has been 100% confirmed), as a potential buyer, I'm missing out on the one key metric that causes franchise valuations to increase exponentially, which is the ballooning TV rights fees.
@gregmparks
Tank55
MVP
Posts: 2804
Joined: Tue Mar 05, 2019 3:57 pm

Re: NFL franchise valuations

Post by Tank55 »

GregParks wrote: Wed Aug 03, 2022 2:38 pmAnd that's fine for FOX. But if their intention is to eventually sell off teams (which I guess we all assume is the case? Not sure if this has been 100% confirmed), as a potential buyer, I'm missing out on the one key metric that causes franchise valuations to increase exponentially, which is the ballooning TV rights fees.
Yeah, this thread has really made me question that assumption. Maybe @herns can weigh in?
2020 East Division Champions
2021 February Monthly T-Shirt Giveaway Champion
nick1091
Running Back
Posts: 170
Joined: Mon Jul 01, 2019 9:16 pm

Re: NFL franchise valuations

Post by nick1091 »

GregParks wrote: Wed Aug 03, 2022 2:38 pm
Tank55 wrote: Tue Aug 02, 2022 10:12 pm
GregParks wrote: Tue Aug 02, 2022 8:52 pm what I understand largely creates that increase in worth of teams is TV rights fees that go through the roof. I don't think ad revenue increases exponentially the way TV rights fees do.
Right, which is why it made sense for FOX to get in the sports ownership business. Rather than be forced to choose between revenue and exposure, they could own the property directly. (As I know you know, this was NBC's thought process back in XFL 2001 after they let the NFL walk.)
And that's fine for FOX. But if their intention is to eventually sell off teams (which I guess we all assume is the case? Not sure if this has been 100% confirmed), as a potential buyer, I'm missing out on the one key metric that causes franchise valuations to increase exponentially, which is the ballooning TV rights fees.
Well the original NY Post article (https://nypost.com/2022/06/28/foxs-usfl ... n-sources/ mentioned "an investor," or "investors," as opposed to owners, which I think is more likely. I'm not sure who buys a team at the kinds of amounts being quoted at this point. Not only do you not have the ballooning rights fees, there's not much in the ancillary revenue streams that makes teams profitable (merchandising, sponsorships, etc.) In terms of gate revenue, the only sample set of data was from one market which hosted all the games and sold tickets at non-sustainable introductory rates.
4th&long
MVP
Posts: 6474
Joined: Sun Nov 24, 2019 2:27 pm

Re: NFL franchise valuations

Post by 4th&long »

nick1091 wrote: Wed Aug 03, 2022 3:02 pm
GregParks wrote: Wed Aug 03, 2022 2:38 pm
Tank55 wrote: Tue Aug 02, 2022 10:12 pm

Right, which is why it made sense for FOX to get in the sports ownership business. Rather than be forced to choose between revenue and exposure, they could own the property directly. (As I know you know, this was NBC's thought process back in XFL 2001 after they let the NFL walk.)
And that's fine for FOX. But if their intention is to eventually sell off teams (which I guess we all assume is the case? Not sure if this has been 100% confirmed), as a potential buyer, I'm missing out on the one key metric that causes franchise valuations to increase exponentially, which is the ballooning TV rights fees.
Well the original NY Post article (https://nypost.com/2022/06/28/foxs-usfl ... n-sources/ mentioned "an investor," or "investors," as opposed to owners, which I think is more likely. I'm not sure who buys a team at the kinds of amounts being quoted at this point. Not only do you not have the ballooning rights fees, there's not much in the ancillary revenue streams that makes teams profitable (merchandising, sponsorships, etc.) In terms of gate revenue, the only sample set of data was from one market which hosted all the games and sold tickets at non-sustainable introductory rates.
The BIRM ticket revenue wasn't even going to Fox the vast majority was going to the city so even that is not legit. But key to success is TV revenue anyway, and that was disclosed, or at least the Ad revenue thr 6/25 was.

The USFL is truely run as one entity more so than XFL which needs duplicate positions for each market (or chooses to). So Investing in the league as a whole makes more sense.

What comes with the ticket revenue is all teh direct and indirect costs. We now know XFL 2.0 was giving a fair amount of tickets away, so it may have 'looked' optically good and helped in stadium $, but not ticket revenue as much as meets the eye.

I do think BOTH leagues will find it difficult to get investors (at least at their asking price) as long as the other league exists.
GregParks
UFLBoard Correspondent
Posts: 2095
Joined: Tue May 28, 2019 8:09 pm

Re: NFL franchise valuations

Post by GregParks »

4th&long wrote: Wed Aug 03, 2022 4:03 pm
What comes with the ticket revenue is all teh direct and indirect costs. We now know XFL 2.0 was giving a fair amount of tickets away, so it may have 'looked' optically good and helped in stadium $, but not ticket revenue as much as meets the eye.
I seem to remember reading recently that NY gave away some tickets in 2020 but can’t find the source either online or on the message board here. Do you happen to have a link to that story?
@gregmparks
4th&long
MVP
Posts: 6474
Joined: Sun Nov 24, 2019 2:27 pm

Re: NFL franchise valuations

Post by 4th&long »

GregParks wrote: Wed Aug 03, 2022 5:20 pm
4th&long wrote: Wed Aug 03, 2022 4:03 pm
What comes with the ticket revenue is all teh direct and indirect costs. We now know XFL 2.0 was giving a fair amount of tickets away, so it may have 'looked' optically good and helped in stadium $, but not ticket revenue as much as meets the eye.
I seem to remember reading recently that NY gave away some tickets in 2020 but can’t find the source either online or on the message board here. Do you happen to have a link to that story?
Besides Whatley (is that his name) video interview this year giving attendance #'s below reported attendance which may be paid vs freebies):

https://businessofsport.net/2020/04/22/xfl-fails-again/

https://www.profootballrumors.com/2020/ ... p-for-sale

I've heard it elsewhere too.
GregParks
UFLBoard Correspondent
Posts: 2095
Joined: Tue May 28, 2019 8:09 pm

Re: NFL franchise valuations

Post by GregParks »

4th&long wrote: Wed Aug 03, 2022 5:32 pm
GregParks wrote: Wed Aug 03, 2022 5:20 pm
4th&long wrote: Wed Aug 03, 2022 4:03 pm
What comes with the ticket revenue is all teh direct and indirect costs. We now know XFL 2.0 was giving a fair amount of tickets away, so it may have 'looked' optically good and helped in stadium $, but not ticket revenue as much as meets the eye.
I seem to remember reading recently that NY gave away some tickets in 2020 but can’t find the source either online or on the message board here. Do you happen to have a link to that story?
Besides Whatley (is that his name)
It's not, but I think it says a lot that you are able to pull up 2+ year old articles critical of something about the XFL in minutes yet can't be bothered to spell the name of a league Vice President correct, whose name is literally all over this site (including in message board thread titles and in the title of front-page articles).
So the first article says (emphasis mine): "...true game attendance figures MAY HAVE BEEN masking how many people were turning up to games."

The second article says (emphasis mine): "...the league was SAID TO BE handing out lots of free tickets..."

It's interesting to me that you're willing to believe these, which cite no sources and are tantamount to speculation, over the article in The Athletic where an actual source provides an actual quote about the TV deal.

Look, I'm not saying the league wasn't giving away tickets. They may well have been. But the new ownership certainly knows how many tickets were sold versus comped and if they think it's worth it to go into the market knowing how much it'll cost to do so, then I trust their judgment and trust that they have earmarked the money to make it work. I guess I'm willing to have the football pulled out from under me a third time :)
@gregmparks
laxtreme56
Coach
Posts: 886
Joined: Tue Jul 28, 2020 6:16 pm

Re: NFL franchise valuations

Post by laxtreme56 »

The Guardians had plenty of BOGO ticket deals and I'm sure more than a few tickets were given away to charities and schools, but that's not really much different than any other professional sports league, with perhaps the exception of the NFL. While the XFL didn't receive any TV revenue in 2020 they did keep all in stadium advertisement. If, for example, Progressive offered $1 million per team to advertise their logo on the 50 yard line with the expectation of 20k fans per game, I doubt they give a damn how many of those fans actually paid as long as they were in the stadium.

Of course I don't believe comping tickets by the boatload is a smart strategy either, but if you're relying on in stadium ad revenue, merchandise sales and concessions, then it's better to paper the crowd a bit and make some money off those $150 replica jerseys and $20 foam fingers everyone loves to buy.
4th&long
MVP
Posts: 6474
Joined: Sun Nov 24, 2019 2:27 pm

Re: NFL franchise valuations

Post by 4th&long »

GregParks wrote: Wed Aug 03, 2022 5:54 pm
4th&long wrote: Wed Aug 03, 2022 5:32 pm
GregParks wrote: Wed Aug 03, 2022 5:20 pm

I seem to remember reading recently that NY gave away some tickets in 2020 but can’t find the source either online or on the message board here. Do you happen to have a link to that story?
Besides Whatley (is that his name)
It's not, but I think it says a lot that you are able to pull up 2+ year old articles critical of something about the XFL in minutes yet can't be bothered to spell the name of a league Vice President correct, whose name is literally all over this site (including in message board thread titles and in the title of front-page articles).
So the first article says (emphasis mine): "...true game attendance figures MAY HAVE BEEN masking how many people were turning up to games."

The second article says (emphasis mine): "...the league was SAID TO BE handing out lots of free tickets..."

It's interesting to me that you're willing to believe these, which cite no sources and are tantamount to speculation, over the article in The Athletic where an actual source provides an actual quote about the TV deal.

Look, I'm not saying the league wasn't giving away tickets. They may well have been. But the new ownership certainly knows how many tickets were sold versus comped and if they think it's worth it to go into the market knowing how much it'll cost to do so, then I trust their judgment and trust that they have earmarked the money to make it work. I guess I'm willing to have the football pulled out from under me a third time :)
Yeah I knew it wasn't right, but had a call coming in and didn't have time to check spelling. Those article I just happened to have from before. I've read else where they did their share of papering. LAextreme is correct. Actual attendance, while not paying can help with in stadium advertising and consessions etc... that's why its done. The point is you can't assume it is all ticket revenue.

Either way you call it, the bankruptcy reporting showed $44m in losses thru February, that's on track for over $100mm for the season, its why VM was willing to commit $300-400mm. I see XFL 3.0 lowering that a bit but not too much.
Post Reply